Analyzing Business Problems

“I started to see that rather than overthinking every decision, I could simply decide to make a decision—any decision. I would learn something whatever happened. Each time I did this it seemed that my ability to tap into my gut increased and my tendency to spend too long analyzing diminished.”
― Ankush Jain

The highlight of this week was analysing the case of Target Canada and playing the role of the protagonist to make a decision.

Let me give a little background:

Target was first launched in 1902 by George D. Dayton in Minneapolis, Minnesota under the name Dayton Dry Goods Company (Dayton). The company quickly developed a brand for dependable merchandise, fair business practice and a generous spirit of giving. Dayton developed a chain of department stores with the vision to “combine the best of the fashion world with the best of the discount world. A quality store with quality merchandise at discount price and a discount supermarket.” Shopping experiences would be fun, delightful and welcoming to the entire family with wide aisles, easy- to-shop displays, fast checkout and ample well-lit parking.

In the 1960s, Dayton moved away from being a department store and adopted the strategy that some considered risky: to be a mass-market discount store catering to value-oriented shoppers seeking a higher quality experience. Within a few years, the organization transformed into one of the largest discount store chains in the United States under the name Target and had more than 75 stores. In 1967, after an IPO, the company unveiled its brand, “Expect More. Pay Less.”

Target provided everyday essentials and fashionable differentiated merchandise at discounted prices through large-format general merchandise and grocery discount stores, as well as an online business. In addition to national brand products, the company sold merchandise under many owned brands (such as Archer Farms, Merona and Up&Up) as well as exclusive partnership brands (such as Sonia Kashuk, C9 by Champion and Cherokee). By the end of 2014, the U.S. business hired around 347,000 employees and owned 1,793 retail outlets and a network of 40 distribution centres (DCs). Target and SuperTarget stores, which spanned an average 45,000 retail square feet, offered a full line of merchandise and were mainly located in suburban areas.5 Target also leased in-store space to Starbucks and Pizza Hut and generated revenues from other complementary amenities, such as Target Pharmacy.6

Brian Cornell, Target Corporation’s (Target) recently appointed chief executive officer (CEO), needed to make a difficult decision: should Target continue operating in Canada? After the launch of 133 stores since 2013, Target Canada was plagued with operational challenges, poor sales and intensifying competition and had reported deep losses amounting to over $1.36 billion.

To carry out an analysis of this case, my group did a lot of role play, acting as the protagonist, antagonist, shareholders, consumers, constantly questioning every single situation to be sure we were not acting based on a bias- as Target was a brand we were all familiar with and loved- but on the facts presented in the case. One of the major lessons I learnt from analyzing this case is how strongly our biases affect our judgement in most situations. It is critical and important in analyzing business problems to always ask the “So what?” question and ensure you are dealing with root causes.

Cheers!